Property the cornerstone of wealth

Talking recently to a group of prospective property investors, Jason Lee, Rawson Auctions’ legal and corporate advisor and the author of two best selling property books, said that at an early stage in his career he had become aware that what set the wealthy apart from the less affluent was that they had a lively interest in property and made it the cornerstone of their investment portfolios.

Quoting the American 'Wealth Coach', Dr David Shaper, Lee said,

"It is of interest that the investment strategy is basically the same for the wealthy and the super-wealthy, they use all sorts of financial instruments but the basis of their wealth is real estate and their investment in real estate gets larger and larger as you go up the wealth ladder."

Shaper, added Lee, has said that high net worth individuals almost invariably own three, four or more homes as well as a variety of income-producing apartments and commercial outlets and 'raw' land pockets.

This, said Lee, is corroborated by Knight Frank's latest High Net Worth Individuals Survey which reveals that the top 3% of the world's wealthiest individuals on average have 36% of their wealth in property as against 26% in stocks and shares.

With interest rates the lowest in many years and with property prices still well off their 2007 peaks as a result of last year's slump, the current time is propitious to invest in property assets, said Lee.

“Sellers are now a lot more realistic about their selling prices and this gives fantastic buying opportunities across the board,” said Lee.

"I really do not want at the end of 2010 to find myself saying to clients with whom I have recently dealt, “Well I am afraid you did miss the boat”.

"Even then, however, will be a reasonably good time to buy because the long term trend in South African property has always been upwards – but the present time could not be better for investing in property and, as I see it, there can be no point in delaying taking the plunge."

Jason Lee is the author of “Making money out of property in South Africa” (Zebra Press 2004) and “Fast forward your retirement through property” (Zebra Press 2009).

Article by: